Meridian Bioscience, Inc. VIVO is scheduled to report second-quarter fiscal 2022 results on May 6.
In the last-reported quarter, the company's earnings of 35 cents per share surpassed the Zacks Consensus Estimate by 40%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed the same in one, delivering an earnings surprise of 9.3%, on average.
Let's see how things have shaped up for Meridian Bioscience prior to this announcement:
Factors at Play
Life Science
During the first-quarter fiscal 2022 earnings call, Meridian Bioscience confirmed that it had been registering a strong demand uptick for its Life Science reagents, driven by the surge in Omicron-induced infections. These reagents are required by the company's customers for various tests. Given that infection rates are still quite high, this strong demand for the reagents are likely to have continued in the fiscal second quarter, thereby pushing up the segmental revenues.
In March, Meridian Bioscience launched two new master mixes that detect DNA and RNA in crude blood samples down to a single copy, enabling the earliest detection of cancer using non-invasive liquid biopsy — Lyo-Ready Direct DNA qPCR Blood Mix and Lyo-Ready Direct RNA/DNA qPCR Blood Mix. In January, the company launched two new master mixes that detect DNA and RNA in crude saliva samples — Lyo-Ready Direct DNA qPCR Saliva Mix and Lyo-Ready Direct RNA/DNA qPCR Saliva Mix — which can be used in either liquid or lyophilized format. These products are likely to have registered strong customer adoption, thereby driving the segment's revenues in the fiscal second quarter.
Robust demand recorded for Meridian Bioscience's immunological products, owing to the increasing requirement of COVID-19 rapid antigen tests, is likely to have continued in the to-be-reported quarter as well, thereby driving the top line for this segment.
Meridian Bioscience Inc. Price and EPS Surprise
Meridian Bioscience Inc. price-eps-surprise | Meridian Bioscience Inc. Quote
Preliminary revenues for the Life Science segment are expected to be between $69 million-$71 million. Per management, strong demand for reagents associated with COVID-19 antigen testing during the recent Omicron wave of infections contributed to Life Science segment results.
Diagnostics
In February, Meridian Bioscience announced that Magellan Diagnostics had resumed manufacturing and distribution of their LeadCare II test kits. This is likely to be a strong revenue driver for the company in the to-be-reported quarter.
During the last-reported quarter, the company received the FDA's 510(k) clearance for its Curian Campy assay (in January 2022) and Emergency Use Authorization for its Revogene SARS-CoV-2 assay (in November 2021), raising our optimism regarding the stock.
During the first-quarter fiscal 2022 earnings call, Meridian Bioscience had confirmed that it was, during that time, in the process of ramping-up its Revogene manufacturing. Per the company, the latest line in Quebec, Canada became operational and the first line in Cincinnati, OH had completed validation and began producing kits in the fiscal first quarter. This is expected to contribute to the company's revenues in the to-be-reported quarter.
Meridian Bioscience is also expected to have witnessed sustained benefits from continued strong demand for its H. pylori franchise during the fiscal second quarter. Further, the company's addition of urea breath testing to its H. pylori franchise with the acquisition of Exalenz Bioscience (the manufacturer of the BreathID system) are expected to have driven its segmental revenues.
Preliminary revenues for the Diagnostics segment are expected to be between $40 million-$42 million. Per management, the earlier-than-expected return of the LeadCare product line to market in the quarter and positive demand for the SARS-CoV-2 rapid antigen test contributed to the Diagnostics segment's results.
Per the preliminary announcement, overall revenues for second-quarter fiscal 2022 are estimated to be $109 million-$113 million, above the company's expectations. The company's preliminary projection of a robust improvement in revenues on the back of solid segmental performance lifts our confidence in the stock.
The Estimate Picture
For second-quarter fiscal 2022, the Zacks Consensus Estimate for total revenues is currently pegged at $99.6 million, implying a surge of 16.8% from the prior-year period's reported number.
The consensus estimate for earnings per share is pegged at 48 cents, implying a decline of 14.3% from the prior-year period's reported number.
What Our Model Suggests
Our proven model predicts an earnings beat for Meridian Bioscience this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Meridian Bioscience has an Earnings ESP of +26.32%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering, as these too have the right combination of elements to beat on earnings this reporting cycle:
Applied Therapeutics, Inc. APLT has an Earnings ESP of +21.95% and a Zacks Rank of 2. Applied Therapeutics has a projected earnings per share growth of 40.2% against the industry's negative return.
Applied Therapeutics' earnings surpassed estimates in two of the trailing four quarters, the average surprise being 2.6%. You can see the complete list of today's Zacks #1 Rank stocks here.
Acadia Healthcare Company, Inc. ACHC has an Earnings ESP of +0.95% and is a Zacks #2 Ranked stock. Acadia Healthcare has an estimated long-term growth rate of 10.3%.
Acadia Healthcare's earnings surpassed estimates in two of the trailing four quarters, the average surprise being 3.9%.
Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +0.87% and is a Zacks #2 Ranked stock. Vertex Pharmaceuticals has an estimated long-term growth rate of 11.5%.
Vertex Pharmaceuticals' earnings surpassed estimates in the trailing four quarters, the average surprise being 10%.
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